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03/27/2009 Audit AUDIT REPORT OF MONROE COUNTY BETWEEN THE COUNTY AND ENTERPRISE LEASING COMPANY FOR OFFSITE CAR RENTAL FEES DUE TO THE KEY WEST INTERNATIONAL AIRPORT March 27,2009 • •0" c vIQ•..�G '1 J V 411 ! 1 eis • Prepared by: Internal Audit Department Clerk of the Circuit Court Danny L. Kolhage, Clerk Monroe County, Florida AUDIT REPORT OF MONROE COUNTY BETWEEN THE COUNTY AND ENTERPRISE LEASING COMPANY FOR OFFSITE CAR RENTAL FEES DUE TO THE KEY WEST INTERNATIONAL AIRPORT TABLE OF CONTENTS Page I. OBJECTIVES AND SCOPE 1 II. METHODOLOGY '1-2 III. BACKGROUND INFORMATION 0 2 IV. AUDIT CONCLUSIONS 3-4 V. AUDIT FINDINGS _I 1. Enterprise excluded certain charges from the formula used to calculate the amount due to KWIA. 5-9 2. Enterprise did not stamp and have the customer sign some contracts/invoices stating they did not arrive in Key West through the airport. 10-13 3. Internal Audit was unable to verify completeness of the information Enterprise provided. 14 i. , 4. Enterprise incorrectly calculated airport fees. 15-16 5. The County should amend Resolution No. 109-2008. 17 VI. SUMMARY 18 VII. EXHIBITS A. Resolution No. 109-2008 B. Dept. of Revenue, Imposition and Payment of the surcharge C. Enterprise Record Retention Guideline D. Estimated Underpayment—Tables 1 & 2 VIII. AUDITEE RESPONSES—Enterprise IX. AUDITEE RESPONSES— County Administrator's r_ I � AUDIT REPORT OF MONROE COUNTY BETWEEN THE COUNTY AND ENTERPRISE LEASING COMPANY FOR OFFSITE CAR RENTAL FEES DUE TO THE KEY WEST INTERNATIONAL AIRPORT I. OBJECTIVES AND SCOPE At the request of the Monroe County Clerk of the Circuit Court, the Internal Audit Department has completed an audit between the County and Enterprise Leasing Company. Resolution No. 109-2008, by the Board of County Commissioners of Monroe County, Florida, provides for a _ Ground Transportation System for the Key West International Airport (KWIA). Exhibit A - Resolution No. 109-2008. The audit objectives were to assess adherence to Resolution No. 109- 2008 Section 4 Permitting and fees, sub-section c) Courtesy vehicles 2(ii). II. METHODOLOGY A. We interviewed the following personnel to obtain information about the Resolution and Enterprise Leasing Company. 1. Peter Horton, Director of Airports 2. Bevette Moore,Airport Business Office Manager 3. The Clerk's Finance Department personnel 4. Pedro Mercado,Assistant County Attorney 5. Keith E. Gurule, Controller Enterprise Leasing Company B. Internal Audit Department examined the following documents: 1. Resolution No. 109-2008, dated April 16, 2008. Exhibit A—Resolution No. 109-2008. 2. Enterprise Leasing Company's Rental Agreements and invoices for: a. January 2007 b. April2007 c. December 2007 d. February 2008 e. May 2008 3. Enterprise Leasing Company's payment reports that listed and summarized the Rental Agreements which included payments and necessary adjustments for the sampled months. 4. Enterprise Leasing Company's Policy # 35105: "Record Retention Guidelines — U.S. and European Groups" 5. Monroe County's Cash Receipts Reports for 2007 and 2008. 6. Florida Department of Revenue, Rule 12A-16.002 Imposition and Payment of the Surcharge. Exhibit B —Dept. of Revenue, Imposition and Payment of the Surcharge. i � 1 C. Internal Audit reviewed Resolution 109-2008 to ensure that the offsite car rental fees paid by Enterprise Leasing Company to the Key West International Airport were calculated as outlined in the Resolution. III. BACKGROUND INFORMATION This audit is based on the definition of gross revenues and offsite permitting fees for car rental agencies as outlined in the Resolution. The scope of the audit was to verify that Enterprise Leasing . Company is properly calculating the fees due to the Key West Airport for visitors that flew into Key West and rented a car from Enterprise Leasing Company. Enterprise Leasing Company is one (1) of three (3) offsite car rental agencies from which visitors flying into Key West can rent cars. Internal Audit took a judgmental sample of five (5) months to verify whether the offsite car rental fees being paid by Enterprise Leasing Company met the Resolution's definition and intent. The sample population that Internal Audit received was approximately six hundred (600) rental agreements per each of the five (5) sampled months. Enterprise Leasing Company is supposed to pay the Key West Airport eight percent (8%) of the money collected from car rentals to customers that flew into the Key West Airport. If the customer did not fly into the airport, Enterprise Leasing Company will manually stamp the rental agreement stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" and have the customer sign below this. Internal Audit examined the sample month's rental agreements for the existence of the stamped renter signature. If stamp and signature were present, then the fees paid for that rental should be excluded from the eight percent (8%) airport fee calculation. 2 l II 17 IV. AUDIT CONCLUSIONS 1. Enterprise excluded certain charges from the formula used to calculate the amount due to KWIA. The net effect for the five (5) sampled months totaled a $277 underpayment by - Enterprise. a. January 2007;underpayment by Enterprise of$92. b. April 2007;underpayment by Enterprise of$73. c. December 2007; underpayment by Enterprise of$16. d. February 2008; underpayment by Enterprise of$68. e. May 2008;underpayment by Enterprise of$28. 2. Enterprise did not stamp and have the customer sign some contracts/invoices stating they did not arrive in Key West through the airport. The net effect for the five (5) sampled months totaled an $18,979 underpayment by Enterprise. a. January 2007;underpayment by Enterprise of$7,189. b. April 2007;underpayment by Enterprise of$7,909. c. December 2007;underpayment by Enterprise of$712. d. February 2008;underpayment by Enterprise of$2,357. e. May 2008;underpayment by Enterprise of$812. Internal Audit calculated the impact of removing the contracts that did not have a stamp and had Key West addresses from the underpayments calculated above. f. January 2007; underpayment by Enterprise of$3,691. g. April 2007; underpayment by Enterprise of$3,018. h. December 2007;underpayment by Enterprise of$391. i. February 2008;underpayment by Enterprise of$1,989. j. May 2008;underpayment by Enterprise of$87. 3. Internal Audit was unable to verify completeness of the information Enterprise provided. Internal Audit was unable to confirm that we reviewed all of the contracts that occurred within the sampled months and therefore we are unable to accurately estimate the impact on the airport fee due to KWIA. 4. Enterprise incorrectly calculated airport fees. The net effect for the five sampled months totaled a $667 overpayment by Enterprise. a. December 2007; overpayment of$14. b. February 2008; overpayment of$131. c. May 2008; overpayment of$522. 5. The County should amend Resolution No. 109-2008 to include various insurances in the definition of gross revenue. 3 The audit result for calendar years 2007 and 2008 was an underpayment to KWIA of $53,565 by Enterprise. (Please refer to the summary section Table 1 on page 17.) Internal Audit then recalculated the amount underpaid after backing out contracts that have Key West addresses. This j resulted in an underpayment of $25,409 to KWIA by Enterprise. (Please refer to the summary section Table 2 on page 17.) • II rl it 4 i 1 V. AUDIT FINDINGS 1. Enterprise excluded certain charges from the formula used to calculate the amount due to KWIA: Finding: According to Resolution No. 109-2008, Section 2 Definitions, sub-section h) "Gross revenues mean - the total charges for time, mileage and personal accident insurance, received or receivable, whether by cash or credit, before any federal, state or local tax and after any discount specifically shown on the car rental agreement for the rental of all motor vehicles by the operator to customers picked up at the airport for and in connection with the rental of a motor vehicle regardless of where the payment is made or where the vehicle is returned." Exhibit A—Resolution No. 109-2008. January 2007 The January 2007 airport fee is comprised of eighty (80) contracts where Enterprise had charged the renter the eight percent (8%) airport fee and then passed these amounts on to KWIA. Internal Audit discovered that Enterprise had used an incorrect formula to compute the airport fee. The errors in Enterprise's formula are listed below. • Enterprise excluded a $2.02 daily surcharge on all January 2007 airport fees charged to renters. Resolution No. 109-2008, Section 2 Definitions, sub-section h) Gross revenues specifically states that gross revenue excludes federal, state, and local taxes. According to the Florida Department of Revenue, Rule 12A-16.002 Imposition and Payment of the Surcharge, sub- section (5)(c), "the rental car surcharge is not considered a tax since it is subject to sales and use tax"; therefore Internal Audit interprets this charge as revenue and it should be included in the monthly airport fee calculation. ■ Enterprise excluded the fuel charge on all January 2007 airport fees charged to the renters. Internal Audit's interpretation of Resolution No. 109-2008, is that this charge should be included in the monthly airport fee calculation. • Enterprise excluded a drop fee on all January 2007 airport fees charged to the renters. Internal Audit's interpretation of the intent of Resolution No. 109-2008, is that this charge should be included in the monthly airport fee calculation. The effect of these errors on the January 2007 airport fee was an underpayment by Enterprise of $92. (Please refer to the summary section on page 17.) • , i April 2007 Internal Audit discovered that Enterprise had used an incorrect formula to compute the airport fee for April 2007. The errors in Enterprise's formula are listed below. ■ Enterprise excluded a $2.02 daily surcharge on all April 2007 airport fees charged to renters. Resolution No. 109-2008, Section 2 Definitions, sub-section h) Gross revenues specifically states that gross revenue excludes federal, state, and local taxes. According to the Florida Department of Revenue, Rule 12A-16.002 Imposition and Payment of the Surcharge, sub- section (5)(c), "the rental car surcharge is not considered a tax since it is subject to sales and use tax"; therefore Internal Audit interprets this charge as revenue and it should be included in the monthly airport fee calculation. ■ Enterprise excluded the fuel charge on all April 2007 airport fees charged to renters. Internal Audit's interpretation of the intent of Resolution No. 109-2008, is that this charge should be included in the monthly airport fee calculation. The effect of these errors to the April 2007 airport fee was an underpayment by Enterprise of$73. (Please refer to the summary section on page 17.) December 2007 Internal Audit discovered that Enterprise had used an incorrect formula to compute the airport fee for December 2007. The errors in Enterprise's formula are listed below. ■ Enterprise excluded a $2.02 daily surcharge on all December 2007 airport fees charged to renters. Resolution No. 109-2008, Section 2 Definitions, sub-section h) Gross revenues specifically states that gross revenue excludes federal, state, and local taxes. According to the Florida Department of Revenue, Rule 12A-16.002 Imposition and Payment of the Surcharge, sub- section (5)(c), "the rental car surcharge is not considered a tax since it is subject to sales and use tax"; therefore Internal Audit interprets this charge as revenue and it should be included in the monthly airport fee calculation. ■ Enterprise excluded the fuel charge on all December 2007 airport fees charged to renters. Internal Audit's interpretation of the intent of Resolution No. 109-2008, is that this charge should be included in the monthly airport fee calculation. ■ Enterprise excluded a drop fee on all December 2007 airport fees charged to renters. 6 Internal Audit's interpretation of the intent of Resolution rpNo. 109 2008, is that this charge should be included in the monthly airport fee calculation. The effect of these errors to the December 2007 airport fee was an underpayment by Enterprise of $16. (Please refer to the summary section on page 17.) February 2008 Internal Audit discovered that Enterprise had used an incorrect formula to compute the airport fee for February 2008. The errors in Enterprise's formula are listed below. • Enterprise excluded a $2.02 daily surcharge on all February 2008 airport fees charged to renters. Resolution No. 109-2008, Section 2 Definitions, sub-section h) Gross revenues specifically states that gross revenue excludes federal, state, and local taxes. According to the Florida Department of Revenue, Rule 12A-16.002 Imposition and Payment of the Surcharge, sub- section (5)(c), "the rental car surcharge is not considered a tax since it is subject to sales and use tax"; therefore Internal Audit interprets this charge as revenue and it should be included in the monthly airport fee calculation. ■ Enterprise excluded the fuel charge on all February 2008 airport fees charged to renters. Internal Audit's interpretation of the intent of Resolution No. 109-2008, is that this charge should be included in the monthly airport fee calculation. • Enterprise excluded a drop fee on all February 2008 airport fees charged to renters. Internal Audit's interpretation of the intent of Resolution No. 109-2008, is that this charge should be included in the monthly airport fee calculation. The effect of these errors to the February 2008 airport fee was an underpayment by Enterprise of $68. (Please refer to the summary section on page 17.) May 2008 • Internal Audit discovered that Enterprise had used an incorrect formula to compute the airport fee for May 2008. The errors in Enterprise's formula are listed below. • Enterprise excluded a $2.02 daily surcharge on all May 2008 airport fees charged to renters. 7 t ,� r_. I Resolution No. 109-2008, Section 2 Definitions, sub-section h) Gross revenues specifically states that gross revenue excludes federal, state, and local taxes. According to the Florida Department of Revenue, Rule 12A-16.002 Imposition and Payment of the Surcharge, sub- section (5)(c), "the rental car surcharge is not considered a tax since it is subject to sales and • use tax"; therefore Internal Audit interprets this charge as revenue and it should be included in the monthly airport fee calculation. ■ Enterprise excluded the fuel charge on all May 2008 airport fees charged to renters. Internal Audit's interpretation of the intent of Resolution No. 109-2008, is that this charge should be included in the monthly airport fee calculation. • _-1The effect of these errors to the May 2008 airport fee was an underpayment by Enterprise of$28. (Please refer to the summary section on page 17.) _ Recommendation(s): 1. Enterprise should include the daily surcharge, fuel charge and drop fee in the monthly airport fee calculation. Response(s): Enterprise: 1. The $2.02 daily surcharge will be included for all rental agreements whereby the airport access fee is charged. Enterprise Rent-A-Car will implement these procedures when an amended resolution is executed. The fuel charge is a method used to recoup the loss of fuel consumption from the customer when the vehicle is returned with less fuel than recorded on the rental agreement. Enterprise Rent-A-Car has received technical advice from The Florida Department of Revenue concerning this matter pursuant to Section 212.05, F.S. and Chapter 206, F.S., as the fuel charge is not taxable. Enterprise Rent-A-Car kindly disagrees and respectfully requests the fuel charge to be excluded from the airport access fee calculation recommendation. In reference to Resolution No. 109-2008, Section 2 Definitions, sub section h), it would appear reasonable to include the drop fee in the definition of gross revenue when calculating the airport access fee. Enterprise Rent-A-Car will implement procedures to include drop fees whereby applicable to the airport access calculation when an amended resolution is executed. I 8 County Administrator's: 1. Working with legal staff, the airport will put Enterprise on notice that they have been excluding certain charges from their monthly airport fee calculation, and we will demand from them' $53,565.24, the amount of the underpayment for calendar year 2007 and 2008 as estimated in Exhibit D. it • j • 9 if 2. Enterprise did not stamp and have the customer sign some contracts/invoices stating they did not arrive in Key West through the airport. Finding: January 2007 Based upon the information supplied by Enterprise for January 2007, Internal Audit identified five hundred sixteen (516) contracts that were not included in the January 2007 airport fee calculation. These five hundred sixteen (516) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport." Without the stamp and renter's signature, Internal Audit assumed that the renter arrived in Key West through the Key West Airport. Therefore these contracts should have been charged the eight percent (8%) fee and included in the airport fee calculation. This error resulted in an underpayment of$7,189 by Enterprise. (Please refer to the summary section on page 17—Table 1.) At the request of the Director of Airports, Internal Audit calculated the impact of removing the contracts that did not have a stamp or a renter's signature stating"Under penalty or perjury I declare that I did not arrive through the Key West Airport" and had a Key West address from the underpayment calculated above. In January 2007 there were one hundred ninety-two (192) contracts that had Key West addresses that we excluded from the above underpayment amount. The remaining three hundred twenty-four (324) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" or a Key West address. These contracts should have been charged the eight percent (8%) fee and included in the airport fee calculation. This error resulted in an underpayment of$3,691 by Enterprise. (Please refer to the summary section on page 17 —Table 2.) April 2007 Based upon the information supplied by Enterprise for April 2007, Internal Audit identified four hundred twenty-two (422) contracts that were not included in the April 2007 airport fee calculation. These four hundred twenty-two (422) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport." Without the stamp and renter's signature, Internal Audit assumed that the renter arrived in Key West through the Key West Airport. . Therefore these contracts should have been charged the eight percent (8%) fee and included in the airport fee calculation. This error resulted in an underpayment of$7,909 by Enterprise. (Please refer to the summary section on page 17—Table 1.) 10 Internal Audit calculated the impact of removing the contracts that did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" and had a Key West address from the underpayment calculated above. In April 2007 there were two hundred and two (202) contracts that had Key West addresses that we excluded from the above underpayment amount. The remaining two hundred twenty (220) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" or a Key West address. These contracts should have been charged the eight percent (8%) fee and included in the airport fee calculation. This error resulted in an underpayment of$3,018 by Enterprise. (Please refer to the summary section on page 17—Table 2.) I December 2007 Based upon the information supplied by Enterprise for December 2007, Internal Audit identified thirty-one (31) contracts that Enterprise did not include in their airport fee. 1 � Thirty (30) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport." Without the stamp and renter's • signature, Internal Audit assumed that the renter arrived in Key West through the Key West Airport. Therefore these contracts should have been charged the eight percent (8%) fee and included in the airport fee calculation. One (1) contract/invoice had charged the eight percent (8%) airport fee to the renter, but the contract/invoice was not included in the December 2007 payment to the airport. These errors resulted in an underpayment of $712 by Enterprise. (Please refer to the summary section on page 17—Table 1.) Internal Audit calculated the impact of removing the contracts that did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" and had a Key West address from the underpayment calculated above. In December 2007 there were nineteen (19) contracts that had Key West addresses that we excluded from the above underpayment amount. The remaining twelve (12) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" or a Key West address. These contracts should have been charged the eight percent (8%) fee and included in the airport fee calculation'. This error resulted in an underpayment of$391 by Enterprise. (Please refer to the summary section on page 17 —Table 2.) 11 ram, February 2008 Based upon the information supplied by Enterprise for February 2008, Internal Audit identified one hundred forty-eight (148) contracts that were not included in the February 2008 airport fee calculation. These one hundred forty-eight (148) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport." Without the stamp and renter's signature, Internal Audit assumed that the renter arrived in Key West through the Key West Airport. Therefore these contracts should have been charged the eight percent (8%) fee and included in the airport fee calculation. This error resulted in an • underpayment of$2,357 by Enterprise. (Please refer to the summary section on page 17—Table 1.) Internal Audit calculated the impact of removing the contracts that did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" and had a Key West address from the underpayment calculated above. In February 2008 there were one hundred and two (102) contracts that had Key West addresses that we excluded from the above underpayment amount. The remaining forty-six (46) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" or a Key West address. These contracts should have been charged the eight IT percent (8%) fee and included in the airport fee calculation. This error resulted in an underpayment of$1,989 by Enterprise. (Please refer to the summary section on page 17—Table 2.) May 2008 Based upon the information supplied by Enterprise for May 2008, Internal Audit identified sixty- - seven (67) contracts that were not included in the May 2008 airport fee calculation. These sixty- seven (67) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport." Without the stamp and renter's signature, Internal Audit assumed that the renter arrived in Key West through the Key West Airport. Therefore these contracts should have been charged the eight percent (8%) fee and included in the airport fee calculation. This error resulted in an underpayment of$812 by Enterprise. (Please refer to the summary section on page 17—Table 1.) Internal Audit calculated the impact of removing the contracts that did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" and had a Key West address from the underpayment calculated above. In May 2008 there were fifty-three (53) contracts that had Key West addresses that we excluded from the above underpayment amount. The remaining fourteen (14) contracts did not have a stamp or a renter's signature stating "Under penalty or perjury I declare that I did not arrive through the Key West Airport" or a Key West address. These contracts should have been charged the eight percent (8%) fee and included in the airport fee calculation. This error resulted in an underpayment of $87 by Enterprise. (Please refer to the summary section on.page 17—Table 2.) 12 Recommendation(s): 1. Enterprise should make necessary changes to their protocol to charge a renter the eight percent (8%) airport fee, or provide the proper documentation on the rental contract if the renter is exempt from the fee. Response(s): Enterprise: 1. Thank you for excluding the rental transactions originating from the Key West residents and the local military facility. Enterprise Rent-A-Car has implemented procedures to ensure all rental transactions are properly documented whereby the transaction does not originate from the Key West airport. County Administrator's: • 1. Working with legal staff, the airport will put Enterprise on notice that they have been excluding charges from their monthly airport fee calculation, and we will demand from them $25,409.15, the amount of the underpayment for calendar year 2007 and 2008 as estimated in Exhibit D. i li 13 3. Internal Audit was unable to verify completeness of the information Enterprise provided. Finding: For the sampled months, Internal Audit inquired if Enterprise could provide a monthly reconciliation where they accounted for all contract numbers. Enterprise informed Internal Audit that they did not have the monthly reconciliation records for the sampled months since they only keep these for three (3) months. Enterprise also sent a copy of their policy and procedures that verifies the time frame for its retention of records. Exhibit C — Enterprise Record Retention Guideline. Internal Audit was unable to confirm that we reviewed all of the contracts that occurred within the sampled months and therefore we are unable to accurately estimate the impact on the airport fee due to KWIA. Recommendation(s): 1. The Board of County Commissioners should amend Resolution No. 109-2008 to include language on a specific timeframe to maintain records. 2. The Board of County Commissioners should determine the impact resulting from Enterprise not providing Internal Audit with complete listing of contracts for the sampled months. Response(s): Enterprise: 1. Enterprise Rent-A-Car will review and implement document retention guidelines that KWIA and Enterprise Rent-A-Car can mutually agree upon. • County Administrator's: 1. With language suggested by the Clerk's Office, Resolution No. 109-2008, was amended by the BOCC on July 15, 2009. The document now includes requirements for a specific timeframe to maintain records. Any other future rental car agreements will contain the same requirements. 14 � I 4. Enterpriseincorrectly calculated airport fees. Finding: According to Resolution No. 109-2008, Section 2 Definitions, sub-section h) "Gross revenues mean the total charges for time, mileage and personal accident insurance, received or receivable, whether by cash or credit, before any federal, state or local tax and after any discount specifically shown on the car rental agreement for the rental of all motor vehicles by the operator to customers picked up at the airport for and in connection with the rental of a motor vehicle regardless of where the payment is made or where the vehicle is returned." Exhibit A —Resolution No. 109-2008. December 2007 After Enterprise paid the December 2007 airport fee, they performed a review of the December 2007 contracts/invoices and identified eighteen (18) more contracts/invoices that should have been included, but were not. Enterprise incorrectly calculated the fees for these contracts by including 1 the Florida Sales Tax within the calculation and included this amount in the January 2008 check to KWIA. Per Resolution No. 109-2008, the airport fee should exclude federal, state, or local taxes. This error resulted in an overpayment of$13.58. (Please refer to the summary section on page 17.) February 2008 After Enterprise paid the February-2008 airport fee, they performed a review of the February 2008. contracts/invoices and identified ninety-seven (97) more contracts/invoices that should have been included, but were not. Enterprise incorrectly calculated the fees for these contracts by including the Florida Sales Tax within the calculation and included this amount in the March 2008 check to KWIA. Per Resolution No. 109-2008, the airport fee should exclude federal, state, or local taxes. This error resulted in an overpayment of$130.65. (Please refer to the summary section on page 17.) May 2008 After Enterprise paid the May 2008 airport fee, they performed a review of the May 2008 contracts/invoices and identified fifty-three (53) more contracts/invoices that should have been included, but were not. Enterprise then incorrectly calculated the fees for forty-seven (47) of the fifty-three (53) contracts by including the Florida sales tax within the calculation and included this amount in the June 2008 check to KWIA. Per Resolution No. 109-2008, the airport fee should exclude federal, state, or local taxes. This error resulted in an overpayment of$53.93. In reviewing May 2008, Internal Audit identified six (6) of the fifty-three (53) contracts should not have been included. Internal Audit excluded these six (6) contracts. This error resulted in an overpayment of$36.20. The third error that Internal Audit identified is a mathematical error that Enterprise committed on the summary that was included with the May 2008 payment. When Internal Audit reconciled summary worksheet,we identified a math error that resulted in a $432.13 overpayment. 15 The net effect of these three (3) errors is an overpayment of$522.26 for the May 2008 airport fee. (Please refer to the summary section on page 17.) Recommendation(s): 1. Enterprise should follow the terms of Resolution No. 109-2008, and exclude federal, state, or local taxes from the airport fee. Response(s): Enterprise: 1. Enterprise Rent-A-Car will cease from including the aforementioned in the calculation of airport access fees. County Administrator's: 1. Enterprise will be put on notice to follow the terms of Resolution No. 109-2008 and exclude federal, state of local taxes from the airport fee. 16 Ff' 5. The County should amend Resolution No. 109-2008. Finding: According to Resolution No. 109-2008, Section 2 Definitions, sub-section h) "Gross revenues mean the total charges for time, mileage and personal accident insurance, received or receivable, whether by cash or credit, before any federal, state or local tax and after any discount specifically shown on the car rental agreement for the rental of all motor vehicles by the operator to customers picked up at the airport for and in connection with the rental of a motor vehicle regardless of where the payment is made or where the vehicle is returned." Exhibit A —Resolution No. 109-2008. In communications with the County Attorney's office, in regards to which insurances should be included in the definition of gross revenue, they feel the County needs to amend the resolution and our agreements at the earliest opportunity to include all of the insurances under the definition of gross revenue. Since the resolution was unspecific as to which insurance should be included in gross revenue Internal Audit did not include any Damage Waiver or Supplemental Liability Protection fees in the airport fee calculation. • Recommendation(s): 1. The Board of County Commissioners should amend Resolution No. 109-2008 and any agreements to include all insurances in the definition of"gross revenue". Response(s): Enterprise: 1. Enterprise Rent-A-Car respectfully requests the Board of County Commissioners provide clarification on the definition of"gross revenue" in which Enterprise Rent-A-Car will support. County Administrator's: 1. Resolution No. 109-2008, was amended by the BOCC on July 15, 2009 with language that • included all insurances and fees in the definition of "gross revenue". Any other future rental car agreements will contain the same language. 17 VI. SUMMARY Based upon the information reviewed by Internal Audit and the overall results of the audit, we computed an average underpayment by Enterprise. The table below outlines the net results of the computed average underpayment of 334%. Table 1 Sample Jan. 07 April '07 Dec'07 Feb '08 May'08 Average Enterprise payment, including 1,899.58 1,132.56 834.36 2,781.50 1,286.19 1,586.84 adjustments. Audit findings, net 7,281.68 7,982.19 715.53 2,294.12 316.96 3,718.10 Internal Audit computed correct 9,181.26 9,114.75 1,549.89 5,075.62 1,603.15 5,304.94 airport fee payment Percentage Enterprise Monthly 483% 804% 186% 182% 125% 334% underpayment Internal Audit used the sampled average underpayment of 334% and multiplied it against the actual payments for calendar years 2007 and 2008. This resulted in $53,565 that Enterprise underpaid KWIA. Exhibit D—Estimated Underpayment. Internal Audit calculated the impact of removing the contracts with no stamp or a renter's signature and had a Key West address from the underpayment calculation above. The table below outlines the net results of the computed average underpayment of 211% for the remaining contracts that did not have a stamp, a renter's signature or a Key West address. Table 2 Sample _Jan. 07 April '07 Dec'07 Feb '08 May '08 Average Enterprise payment, including 1,899.58 1,132.56 834.36 2,781.50 1,286.19 1,586.84 adjustments. Audit findings, net 3,783.87 3,091.39 394.77 1,926.02 (408.26) 1,757.55 Internal Audit computed correct 5,683.45 4,223.95 1,229.13 4,707.52 877.93 3,344.39 airport fee payment Percentage Enterprise Monthly 299% 373% 147% 169% 68% 211% underpayment Internal Audit used the sampled average underpayment of 211% and multiplied it against the actual payments for calendar years 2007 and 2008. This resulted in $25,409 that Enterprise underpaid KWIA. Exhibit D—Estimated Underpayment. 18 jl VII. EXHIBITS I l r-, • • EXHIBIT A RESOLUTION NO. 109-2008 • f I � County Attorney RESOLUTION NO. 109 -2008 A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA, AMENDING RESOLUTION NO. 157- 2000, ATTACHED HERETO, WHICH PROVIDED A GROUND TRANSPORTATION SYSTEM FOR THE KEY WEST INTERNATIONAL AIRPORT; AMENDING SECTIONS 1,2,4,6,7,8,9,10 AND 11 TO PROVIDE NEW REGULATIONS FOR THE STANDING AND PARKING OF TAXICABS, COURTESY VEHICLES AND OTHER MOTOR VEHICLES AT THE AIRPORT TERMINALS; ADDING A NEW SECTION 12 TO PROVIDE FOR AIRPORT DIRECTOR AUTHORITY TO MAKE ADJUSTMENTS TO THE GROUND TRANSPORTATION PLAN; PROVIDING FOR A REVISED MAP IN EXHIBIT"A"; PROVIDING FOR SEVERABILITY; PROVIDING FOR THE REPEAL OF ALL RESOLUTIONS INCONSISTENT HEREWITH; AND PROVIDING AN EFFECTIVE DATE. • WHEREAS, in 2008, the Key West International Airport intends to open a new Terminal and to change the uses of the existing Terminal; and WHEREAS, the Airport Director, in consultation with local transportation entities, has developed a revised plan for the parking, standing and circulation of vehicles at the Airport; and WHEREAS, the Airport Director intends to implement the new ground transportation plan to coincide with the opening of the Airport's new Terminal; and WHEREAS, the County Commission finds that the new ground transportation plan, embodied in this Resolution, is a fair and well-designed system for the several transportation entities that serve the Airport; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY,FLORIDA THAT: Section 1. The foregoing recitals are incorporated herein by reference. Section 2. Definitions. a)Airport means the Key West International Airport. b) Airport Director or Director means the County employee charged with managing the Airport or his designee. c) Charter bus means a motor vehicle that is operated on a regular scheduled route or is chartered for a specific prearranged purpose and is designed to transport more than fifteen persons, including the driver. 1 i ,. d) Courtesy vehicle means a vehicle carrying passengers with reservations at a hotel, motel, resort facility, marina, off-site rental company, or local attraction, without a fee charged to the passenger and is owned or leased by the hotel, motel, resort facility, marina, off-site rental company or local attraction. A courtesy vehicle shall not mean a vehicle owned by a transportation or tour company which itself is retained by the hotel, motel, resort facility, marina, off-site rental company or local attraction to perform a courtesy vehicle function. e) Commercial activity shall mean the exchange, trading, buying, hiring, or selling of commodities, goods, information, services, or property of any kind, or any revenue producing activity on the Airport. f) Contract Vehicle For Hire (CVH) means a vehicle engaged in the transportation of persons for compensation, rented or hired by prearranged contractual arrangement for specific passengers on an itinerary list, not capable of carrying more than fifteen passengers, including the driver. The definition of a CVH shall remain consistent with the definition contained within the City of Key West Code of Ordinances, as amended. g) Delivery vehicle means a vehicle delivering goods or services to County personnel or tenants at the airport. h) Gross revenues mean the total charges for time, mileage and personal accident insurance, received or receivable, whether by cash or credit, before any federal, state or local tax and after any discount specifically shown on the car rental agreement for the rental of all motor vehicles by the operator to customers picked up at the airport for and in connection with the rental of a motor vehicle regardless of where the payment is made or where the vehicle is returned. 1! i) License Holder shall mean the individual, partnership, LLC or corporation that holds an occupational license that is properly licensed by the State and County and the City of Key West if passengers and/or baggage are to be delivered within the city of Key West, for the provision of transportation services as a Charter Bus, Passenger Vehicle for Hire, Contract; Vehicle for Hire, or Courtesy Vehicle. j)Motor vehicle or vehicle shall mean any and all motor driven vehicles. k) Operator means that person actually driving a bus, courtesy vehicle, vehicle for hire, contract vehicle for hire, or delivery vehicle conducting commercial business at the Airport. I)Passenger vehicle for hire shall mean a Taxi cab. m)Person shall mean any individual, partnership,LLC or corporation. n) Queuing area means that area of the Airport designated as the standing area for taxicabs. As set forth in Exhibit"A,"the queuing area shall include both the area incorporating allotted spaces 1-11 and the area incorporating allotted spaces 12-17. �i 2 i o) Permit decal shall mean a decal that is affixed to a License Holder's vehicle showing evidence that the License Holder is in compliance with all State, County and City of Key West (if applicable)regulations, and has paid the appropriate fees. p) Solicit or solicitation means to ask or advertise, through verbal request, by sign, or by • mere physical presence, if a potential customer desires transportation. q) Standing (or stand) shall mean temporary parking during which the driver remains with the vehicle. r) The owner of a beneficial interest means an individual, corporation, LLC or partnership that does not have title to a vehicle but has a right or rights in the vehicle that are normally considered an incident of ownership. Section 3.Exhibits. Exhibit A is a map depicting the various parking and standing areas at the Airport.Exhibit B contains the insurance requirements for the types of vehicles operating at the Airport under the terms of this Resolution. Exhibits A and B are attached to this Resolution and made part of it. Section 4. Permitting; and fees. a) A License Holder wishing to obtain an Airport Vehicle Permit or permit renewal must complete an Airport Vehicle Permit application form for their appropriate service which provides evidence that the applicant is in compliance with State, County and City laws, ordinances and resolutions that apply to the applicant's operation; provide proof of the insurance for each vehicle required by this Resolution; and pay the fee described in the following subsections. However, no City permit or license is required for license holders who deliver passengers and/or baggage to destinations outside the City of Key West. The applicant must disclose on the application form the ownership of the vehicle for which the permit is sought. If the legal owner and the owner of a beneficial interest in the vehicle are different individuals, corporations, LLCs or partnerships, the applicant must list the legal owner(s) and the owner(s) of any beneficial interests. An owner that is a privately held corporation or LLC must list the officers and directors; an owner that is a partnership must list the general partner(s); an owner who is an individual must disclose his or her legal name; an applicant doing business as(d.b.a.)must disclose the entity that is using the d.b.a.name. b) Airport permits shall be issued on a month to month basis. However, permits may be issued on a one, two or three month basis, payable in advance, providing that all insurance requirements are in effect for the period of time involved. c)Courtesy vehicles (1) Courtesy vehicle operators who wish to stop, stand, park, load, or pick up passengers at the Airport must possess an Airport Courtesy Vehicle permit from.the Airport Director for that privilege. (2)The courtesy vehicle permit fees are: _., 3 i4 (i) Except for off-site rental car courtesy vehicles, $400.00 per month per vehicle due the first of each month. If the permit fee is not paid by the fifth day of each month or if the vehicle fails to comply with any other applicable requirement of this Resolution, then the j offending vehicle shall not provide any service at the airport until the permit fee has been paid and, if applicable, any other violation of this Resolution has been corrected. (ii) Off-site rental car courtesy vehicles, any number, shall pay a vehicle permit fee based on a percentage of annual gross revenues at a rate of 8% for all rental contracts generated from customers picked up at the airport. (iii) The courtesy vehicle permit decal must be affixed to the vehicle in the right rear window.Expired permit decals will be removed from the vehicle. d) Charter buses r (1) Charter bus operators who wish to stop, stand, park, load, or pick up passengers at the Airport must possess an Airport Charter Bus permit from the Airport Director for that privilege. (2) The charter bus permit fees are$200.00 per vehicle per month due the first of each month. If the permit fee is not paid by the fifth day of each month or if the vehicle fails to comply with any other applicable requirement of this Resolution, then the offending vehicle shall not provide any service at the airport until the permit fee has been paid and, if applicable, any other violation of this resolution has been corrected. (3) The charter bus permit decal must be affixed to the vehicle in the right rear window. Expired permit decals will be removed from the vehicle. e)Passenger Vehicles For Hire and Contract Vehicles For Hire. (1)Passenger vehicle for hire and contract vehicle for hire operators who wish to stop, stand, park, load and pick up passengers at the Airport must possess an Airport Vehicle for Hire permit from the Airport Director. (2)Passenger vehicle for hire and contract vehicle for hire permit fees are$200.00 per vehicle per month due the first of each month. If the permit fee is not paid by the fifth day of each month or if the vehicle fails to comply with any other applicable requirement of this Resolution, then the offending vehicle shall not provide any service at the Airport until the permit fee has been paid and, if applicable, any other violation of this Resolution has been corrected. (3) The Passenger Vehicle for Hire permit decal or Contract Vehicle for Hire permit decal must be affixed to the vehicle in the right rear window. Expired permit decals will be removed from the vehicle. (f) Temporary permits may be issued on a daily basis at a cost of$10.00 per day per vehicle. An applicant for a temporary permit must fill out the appropriate permit form required by the Airport Director; which provides evidence that the applicant is in compliance with State, County and City laws, ordinances and resolutions that apply to the applicant's operation;provide 4 proof of the insurance required by this Resolution; and pay the fee described. A vehicle is only eligible for a temporary permit for eight days per calendar year. Any vehicle furnishing: Airport service in excess of eight days per calendar year must have a monthly permit as appropriate to the airport service provided by the vehicle. The vehicle will not be eligible for a temporary permit again until the beginning of the next calendar year. Section 5. Unpermitted operators. The operators of vehicles for hire, contract vehicles for hire, courtesy vehicles and chartered buses without an Airport permit may unload passengers at the Airport area designated for general unloading. Unpern fitted operators are prohibited from loading, picking up,or soliciting passengers anywhere at the Airport. Section 6. Parking and standing of vehicles. a) General. Members of the public may load, pickup and unload passengers at the Airport only in areas reserved for general loading and unloading as shown on Exhibit A. Anyone may use the general loading and unloading area to unload passengers. b)Designated parking areas. (1) Exhibit "A" describes different areas on the Airport grounds for the parking and standing of vehicles. In addition to the public parking lot, there shall be seven spaces allotted to thepublic; 16 spaces allotted to taxicabs (in two p separate queuing areas); and nine spaces allotted to a combination of courtesy vehicles, CVH vehicles, limousines, and other vehicles with intermittent use of the Airport transportation system (e.g. sightseeing vehicles and trolleys). The Airport Director shall authorize an area for use by commercial delivery vehicles and Charter Buses. (2) A taxicab that is not a CVH, but whose driver has a manifest for a particular pickup may park or stand in the area allotted to the public. A driver of a taxicab bearing a manifest shall be subject to the rules governing courtesy vehicle operators set forth in sections 7 b) and c). In such instance, a manifest may be in the form of a sign with the passenger's name on it. Section 7. Courtesy vehicle operations. a) Operators of courtesy vehicles shall use the parking areas designated for courtesy vehicles as shown on Exhibit "A". Except as provided herein, the use of the area reserved for courtesy vehicles by anyone other than a courtesy vehicle is prohibited. b) Operators of courtesy vehicles may enter the terminal arrivals area to meet their passengers. These operators shall display signs identifying themselves or identifying the passengers they are seeking. c) Operators of courtesy vehicles or their agents, employees, or accompanying personnel or other person, shall not solicit business in any manner whatsoever anywhere at the Airport and shall not accept for transport any individual without a reservation or a reservation request at the hotel, motel, resort facility or car rental agency for which the courtesy vehicle provides lii 5 transportation. Upon request of the Airport Director, or his designee, the operator of a courtesy vehicle, or accompanying personnel, shall furnish the Director or his designee with the names of its customers as may be necessary to determine compliance with this subsection. d) Courtesy vehicles shall display the name of the hotel, motel, resort facility, marina, off-site rental company, or local attraction, and their logo. The display shall be permanently affixed to the vehicle in a professional business graphic design. Section 8.Charter Bus and delivery vehicle operations. a)Only the operators of buses or delivery vehicles may stop, stand, park,load,unload or pick up passengers at the Airport areas reserved for buses or delivery vehicles. The use of the area reserved for buses or delivery vehicles by anyone other than bus or delivery vehicle operators is prohibited. b) Operators of Charter Buses or their agents, employees, accompanying personnel or other person shall not solicit business in any manner whatsoever anywhere at the Airport and shall not accept for transport any individual without a reservation, Upon request of the Airport Director, or his designee, the operator of a Charter Bus, or accompanying personnel, shall furnish the Director or designee with the names of its customers as may be necessary to determine compliance with this subsection. Section 9. Contract vehicles for hire, trolleys, sightseeing vehicles and limousine operations. a) In waiting for, and in loading of passengers and luggage, contract vehicles for hire, trolleys, sightseeing vehicles and limousine operators shall use the courtesy vehicle area as specified in Section 7 above. b) Contract vehicles for hire, trolleys, sightseeing vehicles, and limousine operators and or their agents, employees, accompanying personnel or other person may enter the terminal arrivals area to meet their passengers. They shall display signs identifying themselves or identifying the passengers they are seeking. c) These operators shall not at any time solicit customers in the terminal area, shall not have a taximeter installed or engage in any transportation "on demand". Section 10. Taxicab operations. The following shall constitute the standards governing the conduct of operations for taxicabs operating at the Airport: a) The Airport Director shall establish a first-in, first-out system for taxicabs (passenger vehicles for hire). There shall be two waiting areas outside the arrivals terminal, together known as the Queuing Area, designated exclusively for taxicabs. The Queuing Area is specifically described in Exhibit"A." All drivers in line in Queuing Area spaces 1 through 11 (as shown on exhibit A) shall remain with their vehicles unless the driver is actively engaged in assisting a passenger. If a driver leaves his or her vehicle for any reason at the time a fare is available, then the driver forfeits his or her right to the fare. A driver in line in Queuing area spaces 12 through 17 may leave his or her vehicle only in order to use the bathroom or attend to an emergency. 6 b) When the first driver in line in the Queuing Area obtains a fare, the next drivers shall move up to the preceding spots. Jumping the waiting line or taking fares out of turn is not allowed. c)If a driver loads a fare and seeks additional fares, the driver must move to the last available space in the Queuing Area. d) A driver may not refuse a fare. Selective screening of potential passengers is not allowed. e)Taxicabs picking up lost baggage by previous arrangement with an airline may park in the area in Exhibit "A" allotted to the public. In this circumstance, no soliciting or acceptance of other fares is allowed. f) If a group request for transportation to the first driver in line exceeds the capability of that vehicle, the request shall be referred to the next driver in line that can accommodate the group, or the group may be broken into smaller groups with the permission of the passengers. g) There shall be no shouting to or soliciting of passengers inside the terminal buildings. h)No obscene language or rowdy or boisterous behavior by drivers shall be allowed. i) When unloading passengers, a driver shall park the vehicles at the curb. No double parking shall be allowed. • j) No double parking is allowed for cabs waiting to move into a taxicab parking spot.- _ k)If a driver discovers or witnesses an alleged or suspected rule violation, he or she shall forward it to Airport Security in written form within 24 hours. l) While drivers are expected to make best efforts to police themselves, they are subject to the direction of any on-site representative of the Monroe County Sheriff's Department. Section 11. Violations. a) All operators of vehicles engaged in commercial activity at the Airport shall comply with this Resolution. b) First offense for any violation of the Resolution by an operator shall result in a written warning to the operator. Said warning shall be in the form of a Monroe County Sheriffs Office field contact. A copy of the warning shall be forwarded to the License Holder of the vehicle and to the Airport Director for review and archiving. c) A driver who commits a second offense within a 12 month period shall result in the offending driver being banned from operating a courtesy vehicle, a passenger vehicle for hire, or a contract vehicle for hire on Airport property for a period of up to 14 consecutive calendar days. An operator so banned shall not be allowed to drop off passengers. The ban shall not apply to the 7 operator's use of the airport for the operator's personal travel. The Monroe County Sheriffs Office shall prepare a report which shall be provided to the Airport Director detailing the date, time and place of the offense as well as all previous offenses. The Airport Director shall issue written notification to the offending driver informing the driver that his privilege to operate at the Airport has been suspended and the effective dates of the suspension. A copy of the written notification shall be provided to the License Holder of the vehicle by certified mail at the address provided on the license application. d) A driver who commits 3 or more offenses within a 12 month period shall be subject to having his privileges to operate at the airport revoked immediately. The Airport Director shall issue a written notice to the offending driver informing the offending driver of the immediate revocation of operating privileges at the Airport. An operator so banned shall not be allowed to conduct commercial activity of any kind including pick up or drop off of passengers. The ban shall not apply to the operator's use of the airport for the operator's personal travel. The offending driver can petition, in the form of a letter, for reinstatement of his privileges to operate at the Airport upon the expiration of 90 calendar days from the effective date of revocation of operating privileges. A copy of the written notification shall be provided to the License Holder of the vehicle by certified mail at the address provided on the license application. e) The Airport Director may request the Monroe County Sheriffs Office issue a trespass warning to any driver whose privileges to operate at the Airport has been suspended. Any Driver who has been issued a trespass warning by the Monroe County Sheriffs Office and returns to the Airport property during the term of the suspension will be subject to arrest Under F.S. 810.09. f) A driver cited under subsection c) or d) above may appeal in writing to the Airport Director within 7 calendar days of the written notification of the penalty. The Airport Director or his designee shall hold a hearing on the appeal within 7 days (holidays and weekends excluded) of receipt of the appeal. Any penalty imposed pursuant to subsection c) or d) above shall remain in force during the pendency of the appeal. All appeals shall be informal in nature and strict rules of evidence shall not apply. Section 12. The Airport Director shall have the authority to make adjustments to the ground transportation system without obtaining an amendment to this Resolution. This authority is delegated in consideration of the harmonious operation of the Airport. The Airport Director shall consult with those entities that provide transportation services at the Airport before implementing changes to the plan. Any such changes shall be in writing and affixed to this Resolution in the files of the County Clerk. Section 13. Severability. If any section, subsection, sentence, clause, item, or provision of this Resolution is held invalid, the remainder of this Resolution shall not be affected by such invalidity. Section 14. Inconsistency. All Resolutions or parts of a Resolution in conflict herewith are hereby repealed to the extent of such conflict. Section 15. Effective date. This Resolution will take effect after the promulgation required in Sec. 332.08 (2) (b), Fla. Stat. i 8 1 PASSED AND ADOPTED by the Board of County Commissioners of Monroe County, Florida, at a regular meeting of the Board held on the 16th day of April, 2008. Mayor McCoy 'Yes Mayor Pro Tern Di Gennaro Yes Commissioner Murphy Yes Commissioner Neugent Yes Commissioner Spehar Yes BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY,FLORIDA (SEAL) AllEST*t. ',AMSTY L. KOLHAGE, CLERK , , B • By: Clerk Mayor/Chairman m ReE COUN ATM NEY C;3 > F PR ED 0 F M: mai 2.11 -o • 70 !STANT C NTY ATTORNEY CfCAS , •_ Date • 7) -11 17 C-1 -.11) in c 9 CAB PARKING(17 Spaces) EXHIBIT "A" 1, I COURTESY PARKING(10 Spaces) -, ....,i„).. CURBSIDE PICKUP(7+) "'EL BUS&DELIVERY mm „_._a__-_L--1- A. o ki io or-II: 1a 1, w II IF es es es 3 . — YilIFILi w ©© f --- . 1 r ,h 1 11IR T'l7_ 112 t gr�„aF:.es�l.i.rrw.r �: .�. - -. TWWC LANE I=ir . - - r 7/.• • --- � s 1i1 [ tJT1TJ1 [ [ E ...._%t,. IfI ' ll1Ifill il,L FUTURE .•,1 1 I EXPANSION 130 EXPANSION ABOVE I. RENTAL cm A SNORT TEM PARKING r ' 1 L I = = II II :): ( : - - .... ,FIZIEL.R - - - 10 L_J ' EXHIBIT B INSURANCE REQUIREMENTS The insurance requirements for vehicles providing ground transportation at Key West International Airport shall be as set forth in this Exhibit. Applicants applying for a permit discussed in Section 4 of this Resolution must provide proof of insurance at least once every six (6) months or as requested by Airport Management. This proof of insurance should be in a form of a Certificate of Insurance issued by a licensed agent for the State of Florida. This certificate should be an original. In the description of operations section, it should clearly state that this is a public livery policy where the insured charges a fee. If the vehicle were a courtesy vehicle, this . would not apply. Additionally, at least once per year, applicants will be required to execute the "Indemnification and Hold Harmless" form contained in this Exhibit. Insurance requirements for all vehicles providing service at the airport shall be as described in Exhibit B-1. r-, 1 I �' EXHIBIT B-1 VEHICLE LIABILITY INSURANCE REQUIREMENTS Recognizing that the work governed by this contract requires the use of vehicles,the Contractor, prior to the commencement of work, shall obtain Vehicle Liability Insurance, Coverage shall be maintained throughout the life of the contract and include, as a minimum, liability coverage for: * Owned,Non-Owned and Hired Vehicles The minimum limits acceptable shall be: $300,000 Combined Single Limit(CSL) If split limits are provided, the minimum limits acceptable shall be: $100,000 per Person $300,000 per Occurrence $50,000 Property Damage The Monroe County Board of County Commissioners shall be named as Additional Insured on all policies issued to satisfy the above requirements Administration Instruction VL2 12 ll i r-, CLERK'S CERTIFICATE OF POSTING I DANNY L. KOLHAGE, Clerk of the Circuit Court in and for Monroe County, State of Florida,DO HEREBY CERTIFY that Resolution No. 109 -2008 amending Resolution No. 157- 2000, which provided a ground transportation system for the Key West International Airport; amending Section 1, 2, 4, 6, 7, 8, 9, 10 and 11 to provide new regulations for the standing and parking of taxicabs, courtesy vehicles and other motor vehicles and to provide for penalties for violations of the regulations at the new Airport Terminal; adding a new Section 12 to provide for Airport Director authority to make adjustments to the ground transportation plan; providing for a revised map in Exhibit "A" which was passed and adopted by the Board of County Commissioners of Monroe County, Florida at a regular meeting held on April 16 2008. That on d9 Z l , 2008, I did post a copy of said Resolution pursuant to Section 332.08 (2) (b), Florida Statute by posting for four (4) consecutive weeks a copy at the front door of the County Courthouse of Monroe County, at Key West, State of Florida, it being the place where Court is held in said County. IN WITNESS WHEREOF, I have hereunto set my hand and seal of the Court, this Zo ,A.D., 2008. ry %a 4 ( '} $ DANNY L. KOLHAGE - ' Clerk of the Circuit Court Monroe County,Florida Clerk 13 i _ EXHIBIT B DEPT. OF REVENUE, IMPOSITION AND • PAYMENT OF THE SURCHARGE 12A-16.002 Imposition and Payment of the Surcharge. (1)(a)The lease or rental in Florida of a for hire passenger motor vehicle is subject to a surcharge of$2.00 per day, or any part of a day,regardless whether the vehicle is licensed in Florida. (b)Each person engaged in the business of leasing or renting for hire passenger motor vehicles is required to collect the rental car surcharge when the lease or rental payments are to be paid under the terms of the lease or rental agreement. !� (2)For the purposes of this rule chapter,the followingdefinitions will apply: P rP P � (a)The term"day"means 24 consecutive hours. (b) The term "for hire passenger motor vehicle" means any automobile designed to carry fewer than nine (9) passengers let or ' rented to another for consideration; offered for lease or rent as a means of transportation for compensation; advertised; or generally held out as being for lease or rent. The term "for hire passenger motor vehicle" does not include any motorcycle, moped, truck, truck trailer,travel trailer, camping trailer,recreational vehicle with living facilities,or van conversion. (3) The surcharge applies to each lease or rental of a for hire passenger motor vehicle, specified in the lease or rental agreement, 1_ ', on the first thirty(30)days the vehicle is continuously leased or rented to one lessee or renter. (a) If a for hire passenger motor vehicle is leased or rented to one lessee or renter under an agreement for thirty (30) continuous days or fewer, or for an unspecified continuous duration, the surcharge is due on the lease or rental payments for the first thirty (30) days of the lease or rental period. (b) When the terms of a lease or rental agreement authorize the lessee to extend the lease or rental beyond the initial lease term —n without executing an additional lease or agreement and without any action on the part of the lessor, the extension period will not be j considered a new lease or rental. (c) When the terms of a lease or rental agreement require the lessee to execute an additional lease or agreement or require any action on the part of the lessor,the additional days during the extension period will be considered a new lease or rental. (4)(a)Motor Vehicle Leased or Rented for Less Than 12 Months. 1. When a for hire passenger motor vehicle is leased or rented in Florida, the lease or rental is subject to the rental car surcharge, even though the vehicle may be driven to another state or the lease or rental payment may be made outside Florida. 2. When a for hire passenger motor vehicle is leased or rented outside Florida, the lease or rental is not subject to the rental car surcharge,even though the vehicle may be driven into Florida or the lease or rental payment may be made in Florida. (b)Motor Vehicle Leased or Rented for 12 Months or Longer. 1. When a for hire passenger motor vehicle is leased or rented in Florida for a term of 12 months or longer, the rental car —! surcharge is due. 2. When a for hire passenger motor vehicle is leased or rented outside Florida for a term of 12 months or longer and the vehicle is { registered, licensed, or titled in Florida, it is presumed subject to the rental car surcharge. This presumption may be rebutted only by documentary evidence that the vehicle was used outside Florida continuously for the first thirty (30) days before being brought into Florida. (5)(a) A person engaged in the business of leasing or renting for hire passenger motor vehicles shall not advertise or hold out to the public in any manner, directly or indirectly, that the dealer will absorb all or any part of the rental car surcharge, relieve the lessee or renter of the payment of all or any part of the surcharge, or that, when added to the lease or rental price, the surcharge or any part thereof will be refunded either directly or indirectly by any method whatsoever. (b) The amount of the rental car surcharge is required to be separately stated on any charge ticket, invoice, or other tangible evidence of lease or rental,and will be a debt from the lessee or renter to the dealer until paid. (c)The rental car surcharge is subject to sales and use tax. (6) Any person who has leased or rented a for hire passenger motor vehicle and cannot prove that the rental car surcharge has been paid to the lessor or other person will be directly liable to the state for any surcharge, interest,or penalty due on such transaction. Specific Authority 212.17(6), 212.18(2), 213.06(1) FS. Law Implemented 212.05(1)(c), 212.06(1)(a), 212.0606, 212.07(2), (4), (8)FS. History—New 11-14-89,Amended 7-7-91, 5-19-93, 3-20-96, 9-28-04. 14 EXHIBIT C ENTERPRISE RECORD RETENTION GUIDELINE Policy # 35105 Enterprise Rent-A-Car Record Retention Guidelines-U.S.and European Groups Alphabetical Listing Holding Period Group Corporate Record/Document Hard Copy Hard Copy Notes ECARS Tickets Voided Report 3 Most 4 Recent Months Examples of voided tickets 1.)Prewrites-account cancels reservation 2.)Tickets created in error and voided 3.)National reservation booked(retail),but renter does not show up 4.)Contract created and later determined the renter does not qualify • 1 EXHIBIT D ESTIMATED UNDERPAYMENT - TABLES 1 & 2 Estimated Underpayment - Table 1 2007 Calendar year - Key West (Enterprise) Jan'07 Feb'07 Mar'07 April'07 May'07 June'07 July'07 Aug'07 Sept'07 Oct'07 Nov'07 Dec'07 Total Actul Enterprise $1,899.58 $853.39 $1,273.67 $1,114.84 $887.31 $621.50 $657.85 $537.16 $467.63 $618.07 $1,124.89 $639.81 $10,695.70 Payment_ Extrapolated monthly 6,344.60 2,850.32 4,254.06 3.723.57 2,963.62 2,075.81 2,197.22 1,794.11 1,561.88 2,064.35 3,757.13 2,136.97 35,723.64 payment @ 334% Estimated $4,445.02 $1,996.93 $2,980.39 $2,608.73 $2,076.31 $1,454.31 $1,539.37 $1,256.95 $1,094.25 $1,446.28 $2,632.24 $1,497.16 $25,027.94 Underpayment 2008 Calendar year - Key West (Enterprise) Jan'08 Feb'08 Mar'08 April'08 May'08 June'08 July'08 Aug'08 Sept'08 Oct'08 Nov'08 Dec'08 Total Actul Enterprise $1,299.21 $1,215.09 $2,431.76 $729.07 $1,149.36 $748.42 $730.48 $456.18 $215.95 $1,081.19 $843.92 $1,294.80 $12,195.43 Payment Extrapolated monthly 4,339.36 4,058.40 8,122.08 2,435.09 3,838.86 2,499.72 2,439.80 1,523.64 721.27 3,611.17 2,818.69 4,324.63 40,732.74 payment @ 334% Estimated $3,040.151 $2,843.31 $5,690.32 $1,706.02 $2,689.50 $1,751.30 $1,709.32 $1,067.46 $505.32 $2,529.98 $1,974.77 $3,029.83 $28,537.31 Underpayment 2007 Estimated Underpayment $25,027.94 2008 Estimated Underpayment 28,537.31 Total Estimated Underpayment $53,565.24 -� Estimated Underpayment - Table 2 2007 Calendar year - Key West (Enterprise) Jan'07 Feb'07 Mar'07 April'07 May'07 June'07 July'07 Aug'07 Sept'07 Oct'07 Nov'07 Dec'07 Total Actul Enterprise $1,899.58 $853.39 $1,273.67 $1,114.84 $887.31 $621.50 $657.85 $537.16 $467.63 $618.07 $1,124.89 $639.81 $10,695.70 Payment. Extrapolated monthly 4,008.11 1,800.65 2,687.44 2,352.31 1,872.22 1,311.37 1,388.06 1,133.41 986.70 1,304.13 2,373.52 1,350.00 22,567.93 payment @ 211% _ Estimated $2,108.53 $947.26 $1,413.77 $1,237.47 $984.91 $689.87 $730.21 $596.25 $519.07 $686.06 $1,248.63 $710.19 $11,872.23 Underpayment 2008 Calendar year - Key West (Enterprise) Jan'08 Feb'08 Mar'08 April'08 May'08 June'08 July'08 Aug'08 Sept'08 Oct'08 Nov'08 Dec'08 Total Actul Enterprise $1,299.21 $1,215.09 $2,431.76 $729.07 $1,149.36 $748.42 $730.48 $456.18 $215.95 $1,081.19 $843.92 $1,294.80 $12,195.43 Payment Extrapolated ' monthly payment @ 2 741.33 2,563.84 5,131.01 1,538.34 2,425.15 1,579.17 1,541.31 962.54 455.65 2,281.31 1,780.67 2,732.03 25,732.36 211% Estimated $1,442.12 $1,348.75 $2,699.25 $809.27 $1,275.79 $830.75 $810.83 $506.36 $239.70 $1,200.12 $936.75 $1,437.23 $13,536.93 Underpayment 2007 Estimated Underpayment $11,872.23 2008 Estimated Underpayment 13,536.93 Total Estimated Underpayment $25,409.15 � I VIII. AUDITEE RESPONSES Enterprise ., .:nterprise 11945 SW 140t1h Terrace 14iami.FL.33186 3C5.278.2902 direct 3f)5A04.1 338 cell 305.256.2039 fax July 10, 2009 Attention: Mark Albury Subject: Audit Responses 1. Enterprise excluded certain charges from the formula used to calculate the amount due to KWIA. Recommendation(s): 1. Enterprise should include the daily charge,fuel charge and drop fee in the monthly airport fee calculation. Response(s): The$2.02 daily surcharge will be included for all rental agreements whereby the airport access fee is charged. Enterprise Rent-A-Car will implement these procedures when an amended resolution is executed. The fuel charge is a method used to recoup the loss of fuel consumption from the customer when the vehicle is returned with less fuel than recorded on the rental agreement. Enterprise Rent-A- Car has received technical advice from The Florida Department of Revenue concerning this matter pursuant to Section 212.05, F.S. and Chapter 206, F.S., as the fuel charge is not taxable. Enterprise Rent-A-Car kindly disagrees and respectfully requests the fuel charge to be excluded from the airport access fee calculation recommendation. In reference to Resolution No. 109-2008, Section 2 Definitions, sub section h), it would appear reasonable to include the drop fee in the definition of gross revenue when calculating the airport access fee. Enterprise Rent-A-Car will implement procedures to include drop fees whereby. applicable to the airport access calculation when an amended resolution is executed. 2. Enterprise did not stamp and have the customer sign some contracts/invoices stating they did not arrive in Key West through the airport. Recommendation(s): 1. Enterprise should make necessary changes to their protocol to charge a renter the eight percent(8%)airport fee, or provide the proper documentation on the rental contact of the renter is exempt from the fee. Response(s): Thank you for excluding the rental transactions originating from the Key West residents and the local military facility. Enterprise Rent-A-Car has implemented procedures to ensure all rental 1 11945 SW 140th Terrace Miami,FL.3318E 305.278.2902 direct 305,904.1338 cell I 305.256.2639 fax transactions are properly documented whereby the transaction does not originate from the Key West airport. 3. Internal Audit was unable to verify completeness of the information Enterprise provided. Recommendation(s): 1. The Board of County Commissioners should amend Resolution NO. 109-2008 to include language on a specific time frame to maintain records. 2. The Board of County Commissioners should determine the impact resulting from Enterprise not providing Internal Audit with complete listing of contracts fro the sample months. • Enterprise Rent-A-Car will review and implement document retention guidelines that KWIA and Enterprise Rent-A-Car can mutually agree upon. 4. Enterprise incorrectly calculated airport fees. • Recommendation(s): 1. Enterprise should follow the terms of Resolution No. 109-2008 and exclude federal, state or local taxes from the airport fee. Response(s): • Enterprise Rent-A-Car will cease from including the aforementioned in the calculation of airport access fees. 5. The County should amend Resolution No. 109-2008 • Recommendation(s): 1. The Board of County Commissioners should amend Resolution No. 109-2008 and any agreements to include all insurance in the definition of"gross revenue". • Response(s): • Enterprise Rent-A-Car respectfully requests the Board of County Commissioners provide clarification on the definition of"gross revenue"in which Enterprise Rent-A-Car will support. If you have any questions or require additional information,please don't hesitate to give me a call. Kind Re ds, Keith Gurule Regional Controller 2 BOARD OF COUNTY COMMISSIONERS • it"; �,- Mayor George Neugent, District 2 Mayor Pro Tem Sylvia J.Murphy, District 5 _,�; Kim Wigington, District 1 OU NTY �M oO N ROE - `!' Heather Carruthers, District 3 KEY WEST V FLORIDA 33040 .� r•�' `" - Mario Di Gennaro,District 4 (305)294-4641 !k ' ' ' Monroe County !�`� Board of County Commissioners Office of the County Administrator • �< The Historic Gato Cigar Factory ,�r/ 1100 Simonton Street, Suite 205 �rt Key West,FL 33040 �. (305)292-4441 —Phone (305)292-4544-Fax ° ` July 21, 2009 Mark Albury Director of Internal Audit Monroe County Clerk's Office 500 Whitehead St. Key West,Fl. 33040 RE: Draft Preliminary Audit Report Enterprise Leasing Company Dear Mr. Albury: Some months ago, Airport and Finance Department staff noticed what appeared to be disparity in off airport rental car revenues. Ms. Marva Green and Peter Horton approached Mr. Kohlage,presented their preliminary findings, and asked that his staff perform an internal audit of Enterprise Rental Car payments to the airport. The Enterprise audit has resulted in five audit fmdings. Those findings and my recommended responses are as follows: Finding 1. Enterprise excluded certain charges from the formula used to calculate the amount due KWIA. Response: Working with legal staff,the airport will put Enterprise on notice that they have been excluding certain charges from their monthly airport fee calculation, and we will demand from them $53,565.24, the amount of underpayment for calendar years 2007 and 2008 as estimated in Exhibit D. Finding 2. Enterprise did not stamp and have the customer sign some contracts/invoices stating they did not arrive in Key West through the airport. Response: Working with legal staff, the airport will put Enterprise on notice that they have been excluding charges from their monthly airport fee calculation, and we will demand from them $25,409.15, the amount of underpayment for calendar years 2007 and 2008 as estimated in Exhibit D. Finding 3. Internal Audit was unable to verify completeness of the information Enterprise provided. Response: With language suggested by the Clerk's Office, Resolution No. 109-2008,was amended by the BOCC on July 15,2009. The document now includes requirements for a specific timeframe to maintain records. Any other future rental car agreements will contain the same requirements. Finding 4.Enterprise incorrectly calculated airport fees. Response: Enterprise will be put on notice to follow the terms of Resolution No. 109-2008 and exclude federal, state of local taxes from the airport fee. Finding 5. The county should amend Resolution No.109-2008. Response: Resolution No. 109-2008,was amended by the BOCC on July 15,2009 with language that included all insurances and fees in the definition of"gross revenue."Any other future rental car agreements will contain the same language. I look forward to reading your final report and will take up the issues with staff at that time. Accordingly, please copy Peter Horton on the final report, so that he can work with staff to take corrective actions. Sincerely, Roman Gastesi County Administrator Cc: Peter Horton